US pet food exports to China may hit US$300 Mil

Pet Industry News
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Despite the COVID-19 pandemic, Chinese and U.S. trade officials reached an agreement that allowed the writing of a USDA Animal and Plant Health Inspection Service protocol.

As the provisions of the U.S.-China Phase One Economic and Trade Agreement come into effect, United States pet food exports to China may grow dramatically.

“This is a spectacular opportunity for U.S. pet food makers,”  Peter Tabor, vice president of regulatory and international affairs for the Pet Food Institute, said. (see video below).

Despite the COVID-19 pandemic, Chinese and U.S. trade officials reached an agreement that allowed the writing of a USDA Animal and Plant Health Inspection Service protocol. The protocol details the procedure whereby U.S. pet foods may enter China. Negotiators managed to clear all major restrictions from the path for U.S. brands to export products to China, Tabor said. It went into effect on June 15.

Opportunities for U.S. pet food companies in China

“They largely addressed a lot of the obstacles to U.S. pet food entering the Chinese market in this Phase One agreement,” Tabor said. “With respect to the major restrictions the bovine restrictions the poultry restrictions and the facility registration process those three areas are addressed in the phase one agreement.

“I think the more interesting discussion around the long-term prospects in the Chinese market relates to really accessing the market and developing it for us pet food makers,” he said. “I was with the US Department of Agriculture for many years before joining the PFI, and I recall several people saying, ‘You cannot treat the Chinese market as a single market. It’s just too big.’”

By big, he means what Euromonitor International estimated to be US$1.7 billion in 2017 and an estimated US$6.1 billion in 2022. Of that, US$2.7 billion may be spent on dog kibble and US$1.3 billion on dry cat food in 2022.

“Our conservative estimate, the PFI estimate, is that once this agreement is operationalized, we could see exports to China from U.S. pet food makers of $US300 million annually,” Tabor said. “It’s going to be really important for U.S. pet food makers to study the Chinese market, to kind of take a long-term view to it. And I think that they will benefit from this opportunity. At the end of this, Chinese pet owners will have the opportunity to choose high quality, safe U.S. pet foods.”

Growing Chinese pet food market

Despite concerns about the damaging effects to the pet industry of China’s trade war with the U.S. and how China’s population has actually begun to decline and age rapidly like in other highly industrialized countries, its pet industry is still looking at a very promising future, Petfood Industry’s Alma Buelva reported.

One reason for this is China’s current unstoppable pet boom as demand for companion animals comes from almost every age group. Given that the standard of living has improved across the country of late, especially in urban centers, young people, adult singles, families with small children and retirees are welcoming pets into their lives more than ever.

According to Euromonitor, China’s pet population has increased by a 7% compound annual growth rate (CAGR) from 2013 to 2017, from 389 million pets to 510 million. It added that the pet population explosion will continue from 2018 to 2022, from 551 million to 755 million at 8.2% CAGR. By that time, China’s population will be plateauing at an estimated 1.411 billion, but the pets’ number will still be rising.

BY TIM WALL ON JUNE 19, 2020

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